TLDR
Quickly estimate your ISO-related AMT. Designed for startup employees, no email required. Updated for 2025.
What Is AMT and Why It Matters for Startup Employees
If you've been granted Incentive Stock Options (ISOs), exercising them may trigger the Alternative Minimum Tax (AMT) — even if you haven't sold the shares. The IRS calculates AMT using a parallel tax system that can result in unexpected liabilities if you're not prepared.
This calculator is designed specifically for startup employees, helping you quickly estimate your potential AMT based on your exercise activity and income. It uses the latest 2025 IRS data and does not collect personal information.
Key Features
- Built for ISO holders at venture-backed startups
- Estimates AMT impact using 409A FMV vs strike price
- No login or email required
- Updated for the 2025 tax year
Start Here: Use the AMT Calculator
Go ahead and try out our simple AMT Calculator that only needs a few inputs (number of options, strike price, fair market value, income level, state, and marriage status). Feel free to reach out if you have any questions!
For questions regarding this AMT Calculator, please feel free to email: jordan@esofund.com
How to Use the AMT Calculator
Inputs you'll need:
- Shares Exercised – Number of ISOs you exercised this tax year
- Strike Price – The price you paid per share
- 409A Value (Fair Market Value) – Per-share value on the date of exercise
- Filing Status – Single, Married Filing Jointly, etc.
- Estimated Income – Your total taxable income for the year
👉 The calculator uses these inputs to estimate your bargain element and calculate your tentative AMT compared to your regular tax.
Formula: (FMV – Strike Price) × Shares = AMT Income
Want the Full Calculation Breakdown?
Here's how the calculator estimates your AMT:
- Begins with Total Income
- Subtracts the Standard Deduction
- Calculates Regular Federal Income Tax based on the value from #2 and your state/filing status
- Calculates ISO Spread from the number of options, strike price, and FMV
- Adds ISO Spread to Total Income to arrive at Alternative Minimum Tax Income (AMTI)
- Subtracts AMT Exemption
- Calculates AMT based on #6 and your state/filing status
- If AMT (#7) is greater than Regular Federal Income Tax (#3) then AMT Owed = AMT-Regular Income Tax. If not, you may not owe any AMT!
Example Scenario
A startup employee exercises 10,000 ISOs at a $1 strike price while the 409A value is $6.
- Bargain Element: ($6 – $1) × 10,000 = $50,000
- Alex's regular tax may be unchanged, but their tentative AMT increases based on this $50,000.
If Alex's total income is $180,000, they may owe $4,000–$6,000 in AMT, depending on deductions and exemptions.
How ESO Fund Can Help With Your AMT
If your estimated AMT bill is too steep to cover out of pocket, ESO Fund can help. We fund ISO exercises and cover AMT risk-free — no personal guarantees, no upfront cost. Contact us below to learn more!
Next Steps
Want to understand your options more clearly?
- Read our Startup Equity Guide
- Learn how ESO Fund can help with funding your exercise
- Or contact us using the form below for a free equity assessment
Written by Jordan Long, Marketing Lead at ESO Fund
Frequently Asked Questions
What is the Alternative Minimum Tax (AMT)?
How do ISOs Trigger AMT?
When you exercise ISOs, the difference between the strike price and fair market value is treated as income for AMT — even if you don’t sell.
Does this calculator apply to NSOs?
No. This tool is designed for ISOs. NSOs are taxed as ordinary income at exercise and are not subject to AMT in the same way.
What happens if I sell the shares?
Selling affects your final tax liability, especially if it's a disqualifying disposition. This calculator focuses only on the exercise-year impact.
Can ESO Fund help cover AMT?
Yes — ESO Fund helps startup employees exercise options and cover AMT without personal risk. Learn more here.
